Economics Homework Help

  

PART 1 

Evaluate the credit quality of your non-investment grade-rated bond. In the post, describe the following with respect to the non-investment grade rated bond above

Seniority ranking of the bond.
Capacity, as evidenced by the following ratios:
EBITDA margin
Return on capital
Debt/capital
Debt/EBITDA
FFO/debt
FCF after dividends/debt
EBITDA/interest expense
EBIT/interest expense

PART 2 – Portfolio role play 

Select two asset-backed securities of your choice for this discussion post.

In this post, describe the following:
Your proposed two chosen asset-backed securities for consideration. Include a chart, with the main characteristics of the two chosen securities.

Your methodology for choosing the two securities.

State the bond that you will remove from the client’s portfolio in exchange for the asset-backed security. Explain your reasons for choosing this bond to remove. (The bond  that will be removed will be Dishnetwork – because it is a junk bond. All the other bonds are investment graded bonds)

Your expectations of how these asset-backed securities will perform in a rising interest rate environment and why.

Specifically relate this to the maturity effect, coupon effect, and/or duration of the chosen securities.